The Business Value of Industrial Automation Solutions

One of the difficulties of being an industrial automation solutions provider is providing evidence that your solutions actually bring business value.  This would seem like a straightforward problem, but, demonstrating value can sometimes be tricky – particularly in situations where the gains offered by automation are not easily monetized.

So, in this article, we just wanted to talk a bit about the issue of demonstrating the value in industrial automation solutions, and why it is sometimes more complicated than just stating a black-and-white ROI.

Finding the Value in Industrial Automation Solutions

In industry, there are two basic types of automation solutions.  “Greenfield” systems are installed alongside a brand-new factory or operations.  “Brownfield” systems are upgrades to existing factories or operations.

Determining actual value in greenfield implementations can be extremely difficult because there is no standard of comparison.  When you are designing a brand-new factory to be run by machines, with no direct human-run alternative, what can you compare it against?  You cannot do an A-B comparison when “B” is imaginary.

In general, when talking about the value in greenfield implementations, we emphasize increased production versus standard design, efficiency and other factors that can be compared against industry standards.  If the factory is running, and it is producing more/better products than a comparable shop run by another company, the value can be inferred – but not precisely calculated. If the automation solution holds design production more efficiently, the difference is measurable; but, comparable only to similar production designs.

This can be an issue for those who want everything quantized and monetized.

Brownfield implementations, on the other hand, make for an easier standard of comparison.  There is plenty of data on performance prior to automation upgrades, so it becomes much easier to point to hard performance gains due to the application of automation solutions and associate them with dollar values.

Another potential way to measure the value of these systems is through ease-of-use, and cost reduction through their implementation.  If the system is producing the same output as the previous configuration, but at substantially reduced operating costs, that too can represent business value expressed in terms of increased profits.

In short, automation solutions are in many ways developing and evolving ways to deliver and properly measure their value.  As they become more commonplace, standardized methods of determining the value of automation solutions will be shared.

ENGlobal Corporation

ENGlobal Corporation specializes in value-focused industrial automation solutions.  Contact us to learn more about the benefits of customized automation solutions.